Sunday, April 20, 2014

Expanding help to the poorest

When the Supreme Court ruled that the Affordable Care Act (ACA) was constitutional, there was an overlooked provision that the Supreme Court ruled was unconstitutional.  The Supreme Court ruled that the mandatory expansion of Medicaid at the state level was unconstitutional.  Despite some claims from op-ed writers at Forbes, President Barack Obama didn't overrule the Supreme Court when they made a decision he didn't like.  Instead, states could choose to voluntarily expand Medicaid to include coverage for those making 138% of the federal poverty level.  With the Medicaid expansion, the federal government would cover 100% of the cost for the first three years.  Then in 2017, the federal government would cover 95% of the cost of expanding Medicaid gradually declining to 90% in 2020 and beyond.  Before the federal government announced the enticing benefits to expand Medicaid, the federal government paid for about 58% of the cost for current Medicaid recipients.  At least one prominent Republican politician used the wrong figures to calculate the costs of expanding Medicaid in his state. Note: The politician has since changed his mind and now supports Medicaid expansion. 

Prior to the ACA, states could set their own eligibility requirements for Medicaid.  Some states were quite generous with their Medicaid eligibility, such as New York which allowed you to be eligible for Medicaid at 150% of the poverty level.  It should be noted that all states have significantly expanded coverage to children with Medicaid and Children's Health Insurance Program (CHIP).  Parents of children and adults without dependent children were not included in these expansions.  The subsidies for health insurance given at the federal level do not appear until you make 100% of the poverty level.  There are literally millions of people who are making too much money to qualify for Medicaid in their state but not nearly enough to qualify for the federal insurance subsidies.  For instance, in Alabama, if a family of three people is making $4,500 in a year, they do not qualify for Medicaid in the state.  Or in Mississippi, if you make more than $5,677, in a family of three you would no longer be eligible for Medicaid.  In Nebraska, a state that I am including because I know the Democratic candidate for Governor is running on expanding Medicaid, a family of three making more than $11,342 is not eligible for Medicaid.  For the most part, the states with the lowest Medicaid eligibility levels are not expanding Medicaid to cover those who may not qualify for the health insurance subsidies.  These states are overrepresented by states that are typically Republican.  Overwhelmingly, they are located in the South.

The non-partisan Kaiser Family Foundation (KFF) estimated that in the states that have not expanded Medicaid, there are five million people who make too much to qualify for Medicaid and not enough to qualify for health care subsidies. This number may decrease as Florida has since decided to expand Medicaid on a trial basis.  They are likely to remain uninsured as they have little options to purchase health insurance.  Of those who are uninsured, nearly half (47%) of them have incomes at or below the Medicaid expansion level (138% of FPL).  The table below shows the percentage of the uninsured who are at or below the Medicaid expansion level of incomes by race:


That table does not look at how many of the uninsured will fall into the coverage gap because of the states not expanding Medicaid. Over one-third of uninsured adults at incomes at or below the Medicaid expansion level will fall into the coverage gap.  40% of Blacks who are uninsured who are at or below the Medicaid expansion level will fall into the coverage gap.  Disproportionately, poor blacks reside in the South.  These states are not moving forward with the expansion of Medicaid.  About 24% of uninsured Hispanics who are at or below the Medicaid expansion level in income fall into this coverage gap.  The rates are lower with Hispanics because states that have high population of uninsured Hispanics, California, Arizona, and New York, have all announced that they are moving forward with Medicaid expansion.  In total, 47% of those falling into the coverage gap are white.  27% of those falling into the coverage gap are black; 21% are Hispanic; 6% are another race.  

Not all Republican states are refusing to expand Medicaid.  One of the more prominent "red" state is Kentucky.  According to the Governor of Kentucky, Steve Beshear's office, there were approximately 200,000 Kentuckians who would fall in this coverage gap without the expansion of Medicaid.  79% of Kentucky adults supported the expansion of Medicaid in Kentucky, according to a poll conducted by the University of Cincinnati.  87% of Kentuckians said that it's important to them for the state to provide health insurance to low income individuals.  Both Kentucky Senators, Mitch McConnell and Rand Paul do not approve of the expansion.  McConnell believed that Kentucky could not afford it and Paul warned that rural hospitals would be bankrupted. The federal government is cutting the Disproportionate Share Hospital (DSH) by $18.1 billion over 7 years based on the assumption that states would expand Medicaid.  This funding helped cover 95% of uncompensated care costs for state-owned hospitals, 69% for local public hospitals, and 38% for private hospitals in Kentucky.  Without the expansion of Medicaid, there would be a sharp increase in costs for uncompensated care. The Kentucky Cabinet for Health and Family Services issued a report recommending the expansion of Medicaid because the hospitals would suffer.  The Robert Wood Johnson and the Urban Institute issued a report concluding that Medicaid expansion greatly favors hospitals.  

Without all states expanding Medicaid, millions of Americans will remain uninsured.  There will be widening disparities between racial and ethnic groups in insurance coverage.  The non-expansion of Medicaid seems to be entirely predicated on political grounds rather than what is good policy.  This is something that should be troubling us all, instead of saying that it's only the poor in those other states that will remain uninsured.

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